RERA, GST slows down Bhopal's realty

BHOPAL: Saurabh Singh owns a duplex on Hoshangabad Road. He had bought the property in 2013, driven by the belief that it would get him good returns after a couple of years. This year, he wanted to sell it for Rs one crore. For past six months, he is trying to sell it, but he is not in luck so far.

Despite climbing down from his initial demand and asking for 30% less than he wanted to sell it for he is yet to get a buyer. “It seems people are not interested in buying property even in decent locations in city,” Saurabh said.

Shyam Lalwani, a property consultant and investor entered into a purchase agreement of a house in Rachna Nagar for Rs 80 lakh. He gave Rs 10 lakh as advance to the house owner and was to pay the remaining amount in six months.

Based on his experience, he thought he would be able to sell it in less than six months at a price higher than he entered into an agreement for. When unable to do so, he was not left with any option, but to cancel the agreement.

These are just two examples of sluggish property market in Bhopal. Builders in Bhopal say they have not witnessed such condition in past three decades.

Realtors say only two or three in a hundred people show interest in buying a property. Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST) have further added to their woes.

Under the RERA, a builder has to comply with a host of conditions, which have been framed keeping in mind the interest of buyers, while the GST increased cost of raw material, the burden of which will ultimately be borne by consumers.

As per the RERA, registry can be done only on finished product due to which cost of registry has gone up. Earlier, registry of the structure, plots or on other stages of construction due to which the cost of registry would be less, said a builder. There is still a lot of confusion on the GST.

Confederation of Real Estate Developers’ Associations of India, Bhopal spokesman Manoj Singh Meek said, “The property market is yet to recover in Bhopal. People invest in properties when they have money. Unless economy revives, the situation would continue to be the same. The government should take a note of it instead of framing tough laws.”

The builders point to even those, who want to invest in real estate market are confused and get distracted after learning they have to pay more stamp duty due to newly-introduced norms.